Senior-ize your dealership: Graying population creates golden opportunities
Every eight seconds another baby boomer turns 50. Every day 5,500 people turn 65. You don't have to read between the lines to get the message: Your tire-buying audience is getting older. Do you need to make some adjustments?
Baby boomers equal money
Baby boomers are people born between 1946 and 1965. There are 83 million of them, including eight million who were born in other countries and moved here. By the end of 2005, the first of the baby boomers will turn 60. By 2030, there will be around 70 million people over the age of 65, according to United States Census Bureau data. That's twice the number of people in that age bracket in 1999.
In addition, people over the age of 50 control an estimated 77% of the nation's disposable income and purchase 43% of all new cars.
Millions of seniors are only semi-retired. A part-time job gives them money for extras and keeps them physically fit and mentally active. Remember, too, that today's seniors are well educated, take the time to read newspaper ads and shop for their purchases. Does that make them a tough sell? Not necessarily, but it can be challenging.
Jim Kennedy, owner of Big Jim's Tires & Wheels in Lake Havasu City, Ariz., a place famous for its retirees, says, "At least 60% of my business is with retirees and customers over the age of 65.
"These folks have money and they will spend money as long as I take my time with them and earn their trust; I can't stress that enough," he says. "Quite a few of my customers own street rods, sports cars or SUVs. This group knows all about specialty vehicles, they know what kind of tires they want and they want to pay as little as possible. Without question, they are price and quality sensitive.
"Generally speaking, they are impatient," says Kennedy. "But if I drop everything I'm doing, concentrate on what they're saying and sell them what they need, they will buy and they will be back."
A large portion of West Palm Beach, Fla.-based Dolphin Tire's retail business is with retirees. "I can always find a tire in the quality and price range the older customer demands" thanks to nearby warehouses, says Dolphin President Jill McKay.
McKay doesn't see a real difference between senior buyers and younger buyers, though older people tend to prefer big, roomy cars like the Mercury Grand Marquis. "Some have money, some don't. I treat the 17-year-old the same as I would an 80-year-old -- with respect. To me, both the young and the old need to understand they are important, so I take time with them. Too many people ignore the kids and the older folks.
"My senior customers appreciate the fact that somebody is paying attention to them," says McKay, who doesn't advertise. "We've been here at the same location for 32 years, and word-of-mouth is all we've needed to remain successful with the senior market segment."
On South Carolina's Hilton Head Island, another retiree hotspot, seniors represent nearly 75% of John Burke's business. The Savannah Tire & Brake Alignment Center salesman says changes in tire technology need to be explained to seniors. "Many of them are still operating on outdated assumptions (concerning such things as) the need for a speed-rated tire.
"That's probably my toughest sell. But when I take the time to explain how speed-rated tires are constructed, why they come on cars as OE and some of the history (behind) speed-rated tires, the senior citizen understands and accepts both the technology and the explanation."
Burke's senior tire buyers are smart when it comes to money. "They are careful about what they buy and want the best buy for their money," he says. "I respect that as much as I do their good morals, their sense of humor and their loyalty.
"It's an absolute that I must be as honest with them as they are with me. These are successful people who have made it on their own and now want a little bit of respect." Burke keeps two loaner cars on-site and offers free rotation and safety inspections to all of his senior customers.
Senior citizens are Ryan Benton's favorite customers -- and some of his most knowledgeable buyers.
"It's important to remember that these people are readers," says Benton, who manages Black's Tire Service in Wilmington, N.C. "They shop the newspapers for price, quality and value and come to me pretty well-informed. It's my job to sell what's best for them. They are also very brand-conscious and are likely to go with a name they know."
Benton says seniors represent about 20% of his overall business. "Most of them pay with plastic or check, but unlike other age groups, we don't have a problem with bad checks from our seniors." To show his appreciation, he offers older buyers a 10% discount, free tire rotation and free safety checks.
Taking the time to speak with seniors is crucial to earning their business, Benton says. "I enjoy it because I always learn something from the experience. If that isn't a symbiotic relationship, I don't know what is."
Needs vs. wants
Jack Baun, president of Barberton Tire Service Inc. in Barberton, Ohio, an old factory town near Akron, divides seniors into three groups: "older" seniors over the age of 75, "new" seniors between 65 and 75, and "young" seniors between 60 and 65.
"The first thing I do with a senior customer is separate needs from wants," says Baun, a former tire company manager. "Seniors generally come in with a preconceived notion of what they want to buy, and that notion is often not their best choice. It's my job to steer them to the right tire for their car, their style of driving and what kind of tire they might need at a given moment." (In the photo Ernie Schaefer, Barberton Tire vice president, explains a tread design to Virginia Suich of nearby Akron.)
His no-nonsense approach works. "Seniors are well-educated, they've been around a long time and they've seen just about everything. They can tell when a salesman is telling them the truth and when he doesn't know what he's talking about. As I work at qualifying the senior buyer, he or she is busy qualifying me."
Seniors want value for the money they're spending, according to Baun. "For them, quality and price equal value." Part of that includes educating them about maintenance practices like having their tires rotated every 6,000 miles. "It means I get to see my senior tire customers more than once every 50,000 miles. And it gives my techs a chance to make sure their brakes, belts, hoses and other undercar trouble spots are in order."
Selling to seniors boils down to trust. "They trust me to inspect their car and to return that car to their doorstep when I'm finished." Customers who pick up cars after Baun has closed will find a set of keys locked inside their vehicles at their request, "as long as they have the other set."
He doesn't charge seniors for rotation, light bulbs, air pressure adjustments or fuses. "I've learned that my honesty will be repaid with their loyalty.
"Frankly, I'd rather work with seniors than any other age group. I consider senior buyers to be my number-one quality customer. Getting paid is never a concern, they're a gregarious group and they tell their friends about their experiences at my shop. To me, they're the best that society has to offer."